Fort Smith Light & Traction Company v. McDonough

• Decision Date: 14 June 1915
• Docket Number: 42
• Citation: 177 S.W. 926,119 Ark. 254
• Parties: FORT SMITH LIGHT & TRACTION COMPANY v. MCDONOUGH
• Court: Arkansas Supreme Court

177 S.W. 926

119 Ark. 254

FORT SMITH LIGHT & TRACTION COMPANY v. MCDONOUGH

No. 42

Supreme Court of Arkansas

June 14, 1915

Appeal from Sebastian Circuit Court, Fort Smith District; Daniel Hon, Judge; reversed.

Judgment reversed and cause remanded.

Hill Brizzolara & Fitzhugh, for appellant.

1. This case presents a single issue, Are the tracks, rails and ties of a street railway company under a franchise assessable for bridge taxes under the Act of 1909, page 325? This court, in Lenon v. Brodie, 81 Ark. 208, finally and completely determined this issue. This decision is sustained by the great weight of authority. 1 Page & Jones on Taxation by Assessments, § 601; Hamilton on Law of Special Assessment, § 284 f. f.

2. Lenon v. Brodie has not been changed by subsequent legislation. Acts 1907, page 402, applies only to steam railroads. 69 Ark. 68.

3. Act 119, Acts 1909, 325, only provides for the assessment of real estate, and the tracks, ties and easement of a street railway are personal property. 24 App.Div. (N. Y.), 489-491; 126 N.Y 147; 43 Hun, 119; 17 N.E. 954; 94 P. 194; 108 S.W. 960; 3 N.W. 84; 44 S.W. 693; Kirby's Dig., §§ 5673 6936; 81 Ark. 208. The term "railroad" or "railway" does not include street railway company. 23 How. 435; 54 N.E. 1076; 78 N.W. 1032; 61 Minn. 435; 63 N.W. 1099; 28 Minn. 373; 10 N.W. 205; 130 N.W. 71; 52 Id. 902; 27 Id. 839. Laws passed by the Legislature in regard to railways have no application to street railway companies. 77 Ark. 599; 112 P. 583-7; 108 S.W. 960.

4. Assessments for local improvements must be confined to real estate. 31 Minn. 354; 27 P. 1077; 45 N.J.L. 258; 34 Am. Rep. 451; 106 Cal. 420; 27 N.E. 282-3; 94 P. 1075. Nellis on Street Railways, § 179. There must be a special benefit to land to make it subject to special assessments. 96 Ark. 419. While railroad tracks, etc., are real estate (Kirby's Dig., § 6940) street railway tracks, etc., are personal property. Kirby's Dig., § 6936; 96 Ark. 419; 81 Id. 567.

James B. McDonough, for appellee.

1. The authority to levy assessments for local improvements has its source in the sovereign power of taxation. 164 U.S. 112; 96 Ark. 410. The decision by the Legislature that a "railroad," "right-of-way" and "roadbed" is benefited is conclusive. 106 Ark. 296; 104 Id. 425; 103 Id. 452.

2. The doctrine of Lenon v. Brodie, 81 Ark. 208, is not applicable. 77 Ark. 599; 64 Id. 420; 87 S.W. 1096; 68 Ark. 376. Appellant company is an interurban railroad, and as such has the same rights and liabilities as steam railroads. 77 Ark. 599; 105 Id. 294; 3 Elliott on Railroads, §§ 1096ba. to 1096be.; Nellis on St. Rys., §§ 146, 164; 106 N.E. 911; 169 S.W. 1045; 99 Wis. 83; 166 Pa.St. 62; 125 Iowa 430; 81 Mo.App. 78. "Railroads" includes street railroads. 24 Ill. 52 and cases, supra; 178 Pa.St. 186; 147 N.W. 318; 90 Tenn. 235; 78 Conn. 291; 192 Ill. 212; 104 N.E. 1080; 1 Elliott on R. R., § 6; 68 Ark. 380; 96 S.W. 707.

3. The rule in Lenon v. Brodie has been abrogated by subsequent legislation. Acts 1907, p. 402. The language of this act includes street railways, cases supra.

4. Lenon v. Brodie failed to recognize that street railways and steam railroads in a street had the same rights. The court followed 187 Mass. 500, but there are many reasons why the Massachusetts rule should not be applied in Arkansas. All railroads are public highways and common carriers. Art. 17, § 1, Const.; Kirby's Dig., § 737. The right-of-way is real estate. 73 Ark. 302; 64 Id. 432; Kirby's Dig., §§ 6872, 6940, 6945. 176 Ill. 501; 32 Cal. 500. Right-of-way means the roadbed and tracks. 158 Ill. 64; 72 Ark. 119; 130 Mo.App. 162.

5. Under the act of 1909 the right-of-way and roadbed is subject to tax. 115 Ark. 454. There are no exceptions and no exemptions. 119 Ark. 314; 70 S.W. 451; 69 Id. 68; 86 Id. 231; 96 Id. 410; 78 Ark. 468; 103 S.W. 452; 99 Id. 100; Page & Jones on Assessments, § 422; 195 U.S. 351; 207 Id. 20; 172 Id. 269.

MCCULLOCH, C. J. KIRBY, J., dissents.

OPINION

MCCULLOCH, C. J.

The question involved in this case is whether or not the rails and ties composing the tracks of appellant, Fort Smith Light & Traction Company, laid along the streets of the city of Fort Smith, are assessable for local improvement under the special act of the General Assembly of 1909, ^[*] creating an improvement district for the purpose of constructing a bridge across the Arkansas River. The district includes the Fort Smith District of Sebastian County and nearly all of Crawford County, and includes the whole of the cities of Fort Smith and Van Buren. Appellant operates a street railway in each of those cities, and also operates an interurban line which connects the two systems. The company was first organized under the statutes of this State which authorize the organization of business corporations, and was subsequently granted a charter under the Act of 1901 authorizing the organization of companies for the operation of interurban lines of railway. The statute creating the improvement district provides for the assessment of real property in the district, and a clause thereof provides that "all railroads, tramroads, right-of-way, roadbeds and appurtenances in said district shall be assessed according to benefits and increase in value in like manner as herein prescribed for real estate, except that said assessment shall be made per mile." The appellant pays taxes on its tracks outside of the two cities, which are connected thereby, but disputes the authority of the improvement district to tax the tracks inside of the city of Fort Smith, which are maintained over and along the public streets. The circuit court decided that the tracks along the public streets of Fort Smith were subject to the improvement tax, and an appeal has been prosecuted to this court.

It must readily be conceded, and it is conceded by appellee, that taxation for local improvement must be confined to real estate to be benefited by the proposed improvement. Personal property is not subject to taxation for that purpose, nor was it attempted in the enactment of the statute under consideration to tax personalty. The statute expressly provides that real estate only shall be assessed, but in effect declares that railroads, tramroads, etc., shall be deemed to be real estate within the meaning of the statute. It is doubtless within the power of the Legislature to classify property of doubtful character as real estate for the purpose of making it subject to assessment for local improvements. The statutes of this State provide that the tracks and right-of-way of railroads shall be real estate for the purpose of taxation (Kirby's Digest, §§ 6940-6944), and we have held that that classification makes property of that kind subject to special taxation for local improvement. St. Louis Southwestern Railway Company v. Board of Directors Red River Levee District, 81 Ark. 562. We have decided, however, in another case, that the tracks of a street railway company laid along the streets of a city do not constitute real estate and are not subject to special taxation. Lenon v. Brodie, 81 Ark. 208, 98 S.W. 979. In reaching that conclusion we followed a line of Massachusetts cases holding that the franchise of a street railway company to operate along the public streets of a city or town constituted "no easement or freehold interest in the soil, or exclusive control of the highway in which a location is granted to lay tracks and operate the road." Lorain Steel Co. v. Norfolk & Bristol Street Ry. Co., 187 Mass. 500, 73 N.E. 646; New England Tel. & Tel. Co. v. Boston Terminal Co., 182 Mass. 397, 65 N.E. 835. The further reasoning of the cases is that "the right conferred is to use the way within its location in common with others, and not exclusively for its own benefit," and that on that account there is no interest in the soil which would constitute real estate within the meaning of the taxation statute. It is admitted that there is a conflict in the authorities on that point, but this court has taken a position on the question and there is no reason to change it.

The General Assembly of 1907 ^[*] amended the improvement district laws by inserting the following provision with reference to the assessment of real estate: "And if any railroad company owning or operating a line of railway in this State shall occupy any street within said district by having lain therein its railway tracks, and by using said street as a right-of-way, then said railway tracks and right-of-way shall be subject to assessment by said board in the same manner as each lot, block or other subdivision of land provided for in this act; and the words 'blocks, lots or parcels of land,' whenever used in this act, shall include said railway track and right-of-way."

That statute, however, is not broad enough in its terms to include the tracks of street railways, for it is obvious from the words employed that the lawmakers had in mind only companies owning and operating steam railways. The distinction between the two kinds of railways is so well known that the language used leaves no doubt as to which was intended. A street railway, according to our holding in Lenon v. Brodie, supra, has no right-of-way along the streets in the sense in which that term is generally understood, but is merely given a franchise to use the street in common with other travelers. The term "right-of-way" is understood to mean the exclusive right-of-way such as used by companies operating steam railway lines. This court decided in Reichert v St. Louis & S. F. Ry. Co., 51 Ark. 491, 11 S.W. 696, that a city can not grant to a railway company a right-of-way over one of its streets, for the reason that the fee belongs to the owners of the adjacent lots, subject to the easement of the...